CIL Nova Petrochemicals Ltd. (CNOVAPETRO) - Auditors Report

Company auditors report

To

The Members of

CIL NOVA PETROCHEMICALS LIMITED

Ahmedabad

1. Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of CIL NOVAPETROCHEMICALS LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2015 the Statement of Profit and Loss the Cash Flow Statement for theyear then ended and a summary of the significant accounting policies and otherexplanatory information.

The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. Auditors Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Companys Directors aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:-i. In the case of the Balance Sheet ofthe state of affairs of the Company as at March 31 2015; ii. In the case of the Profitand Loss Account of the profit for the year ended on that date; and iii. In the case ofthe Cash Flow Statement of the cash flows for the year ended on that date.

5. Report on Other Legal and Regulatory Requirements

i. As required by the Companies (Auditors Report) Order 2015 ("theOrder") issued by the Central Government of India in terms of subsection (11) ofsection 143 of the Companies Act2015 we give in the Annexure a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

ii. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books .

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(e) On the basis of the written representations received from the directors as on 31stMarch 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2015 from being appointed as a director in termsof Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements  Refer Note 26 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For J. T. Shah & Co.

Chartered Accountants

(FRN No. 109616W)

Sd/-

( J.T. Shah)

Date : 30/05/2015

Partner

Place : Ahmedabad

(M. No. 3983)

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 5 (i) of our Report of even date to the Members of CIL NOVAPETROCHEMICALS LIMITED for the year ended 31st March 2015.

1. In respect of Fixed Assets :

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets on the basis of available information.

(b) As per the information and explanations given to us the management atreasonable intervals during the year in accordance with a programme of physicalverification physically verified the fixed assets and no material discrepancies werenoticed on such verification as compared to the available records.

2. In respect of its Inventories :

(a) The inventory has been physically verified during the year by the management.In our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business.

(c) On the basis of our examination of the records of inventory we are of opinionthat the company is maintaining proper records of inventory. The discrepancies noticed onverification between the physical stocks and books records were not material.

3. In respect of Loans and Advances granted during the year.

As regards the loans the company has not granted any loans secured or unsecuredduring the year under audit to the companies firms and other parties covered in theregister maintained under section 189 of the Companies Act 2013 and therefore theclauses (iii) (a) and (b) of the Companies (Auditors Report) Order2015 are notapplicable.

4. In our opinion and according to the information and explanations given to usthere are adequate internal control procedures commensurate with the size of the Companyand the nature of its business with regard to purchases of inventory fixed assets andwith regard to the sale of goods and services. During the course of our audit no majorcontinuing failures to correct major weaknesses has been observed.

5. During the year the company has not accepted any deposits and hence thedirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act and the rules framed there under arenot applicable to the company.

6. As per the information and explanation provided to us the company is notrequired to maintain the cost records as per the provisions of Companies(Cost Records andAudit) Rules2014 hence Clause (vi) of the Companies (Auditors Report) Order2015.

7. In respect of Statutory Dues :

(a) According to the records of the Company the Company is by and large regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees state insurance income tax sales tax wealth tax service taxduty of customs duty of excise value added tax cess and any other statutory dues withthe appropriate authorities applicable to it.

(b) According to the information and explanations given to us no undisputedamounts payable in respect statutory dues were outstanding as at 31st March2015 for a period of more than six months from the date they became payable.

(c) According to the records of the company the dues of income tax sales taxwealth tax or service tax or duty of customs or duty of excise or value added tax or cesswhich have not been deposited on account of disputes and the forum where the dispute ispending are as under:

Name of the Statute

Nature of the Dues

Year

Amount in

Forum where dispute is pending

Rs

Wealth Tax Act1957

Wealth Tax

2007-08

256434

Commissioner of Income Tax (Appeals)

Income Tax Act1961

Income Tax Demand

2010-11

2719970

Income Tax Appellate Tribunal

Income Tax Demand

2011-12

23721760

Commissioner of Income Tax (Appeals)

The Central Excise and Customs Act

Excise Duty & Penalty

2003-04

3230730

Custom Excise and Service Tax Appellate Tribunal

Excise Duty & Penalty

2004-05

3398641

Custom Excise and Service Tax Appellate Tribunal

Excise Duty & Penalty

2005-06

146479

Assistant/Additional Commissioner of Central Excise

Excise Duty & Penalty

2006-07 & 2007-08

1959742

Commissioner of Excise and Customs (Appeals)

Excise Duty & Penalty

2006-07

94093

Custom Excise and Service Tax Appellate Tribunal

The Textile Committee Amendment Act 1973

Textile Cess

1995 to 2005

5090119

Textiles Committee Government of India Ministry of Textiles

(d) During the year no amount is required to transfer to the investor education andprotection fund and hence clause (c) of clause (vii) of the Companies (AuditorsReport) Order2015 is not applicable to the company.

8. The company has no accumulated losses and has not incurred any cash lossesduring the financial year under review or in the immediately preceding financial year.

9. Based on our audit procedure and according to the information and explanationgiven to us we are of the opinion that the Company has not defaulted in repayment of duesto a Financial Institutions Banks or debenture holders.

10. According to the information and explanations given to us the Company has notgiven any guarantee for loans taken by others from bank or financial institutions.

11. According to the information and explanations given to us during year underreview the company has not taken any term loans during the year.

12. Based upon the audit procedures performed and information and explanationsgiven by the management we report that no material fraud on or by the Company has beennoticed or reported during the course of our audit.